China’s Youth Unemployment Rate Hits Record High Amid Economic Slowdown and Covid-19 Lockdowns

China’s official data released on Thursday reveals that the country’s youth unemployment rate surged to a record-breaking 20.8% in May. This alarming increase underscores the impact of the economic slowdown and a series of Covid-19 lockdowns that China has been grappling with.

Youth Unemployment Figures and Context

1. Unprecedented Youth Unemployment: The National Bureau of Statistics reported that the unemployment rate for Chinese individuals aged 16 to 24 rose from 20.4% in April to 20.8% in May. This marks the highest rate recorded since the bureau began publishing youth unemployment data in 2018.
2. Economic Challenges and Covid-19 Lockdowns: China’s economic growth has encountered headwinds, leading to a slowdown and subsequent job losses, especially in the service sector. The wave of Covid-19 lockdowns further exacerbated the situation, disrupting businesses and contributing to the rise in youth unemployment.

Implications for China’s Social Stability

1. Concerns for Social Stability: The surge in youth unemployment raises concerns regarding social stability in China. The younger demographic is more likely to be unemployed and has a higher propensity for participating in protests and demonstrations. Addressing youth unemployment becomes crucial for averting potential social unrest.
2. Government Initiatives and the Way Forward: The Chinese government has implemented measures to support the economy, including interest rate cuts and issuing special bonds for infrastructure projects. However, it remains uncertain whether these actions will be sufficient to prevent a deeper economic slowdown.

Factors Contributing to Youth Unemployment

1. Slowing Economic Growth: China’s economy expanded by 8.1% in 2022, the slowest pace in a decade. The slowdown has resulted in job losses, particularly in the manufacturing and service sectors.
2. Impact of Covid-19 Lockdowns: Stringent lockdown measures aimed at curbing the spread of Covid-19 have disrupted businesses and resulted in job losses, particularly in the service sector.
3. Demographic Transition: China’s population is aging, leading to a decline in the number of young people entering the workforce. This demographic shift has placed downward pressure on wages and made it more challenging for young individuals to secure employment opportunities.

While the government has taken initial steps to tackle youth unemployment, such as providing business subsidies for hiring young individuals and offering training programs, more comprehensive actions are needed to effectively address this pressing issue.